Preferred stocks give up early gains; Deutsche Bank paper rises on investment speculation

By Stephanie N. Rotondo

Seattle, Oct. 20 – The preferred stock market was firm early Thursday though it ultimately ended weaker.

Still, a market source noted that the space rebounded a bit before the bell.

The Wells Fargo Hybrid and Preferred Securities index ended off 4 basis points, though it was up 10 bps at mid-morning.

The source said that the market was down 10 bps to 15 bps at its low point.

“I think it was just following the stock market,” the source said, adding that the preferred market’s fall was “slower” than that seen in the equities.

Looking to Friday’s session, the source said there was a “sizable bid wanted list” circulating. That could result in more weakness.

Meanwhile, Deutsche Bank AG was in the news again, as a German publication, Manager Magazin, reported that sovereign wealth funds from Qatar and Abu Dhabi, as well as an investor from China, would be willing to up their stake in the struggling financial institution.

The bank’s trust preferreds were pushing higher on the news.

The 6.55% TruPs (NYSE: DXB) were the most actively traded security, adding 44 cents, or 1.9%, to $23.57. The 8.05% TruPs (NYSE: DKT) gained 11 cents to trade at $24.91, while the 7.6% TruPs (NYSE: DTK) improved 7 cents to $24.91.

The sovereign wealth funds are already the German bank’s largest investor, holding about a 10% stake. The funds have expressed a willingness to increase that investment to 25%, according to the news outlet.

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